Murray & Roberts – 1H FY22 Results
Key message: Covid delays on projects will impact FY22 results, but Murray & Roberts has good contractual cover. FY23 earnings are forecast to grow substantially.
WBHO – 1H FY22 Results
Key message: The cost of exiting Australia is high, but the balance sheet is still strong enough to support the remaining businesses.
WBHO – End of Australia
Key message: WBHO has indicated the end of financial assistance to WBHO Australia, with the impact of putting WBHO Australia into administration. We attempt to assess the cash impact to WBHO of the announcement.
Afrimat – Pre-Close Update
Key message: Iron ore prices have recovered, and Nkomati mine is profitable. Acquisitions continue with the Glenover surface dump purchase.
Cement Import Monitor
Key message: November and December imports continued the relatively low levels from October at 81kt and 43kt respectively, well off September levels of 151kt. This is a more expected outcome following supply chain disruptions.
Diversified Industrials, Construction & Materials
Key message: Outperformance in CY21 was driven by a general rapid recovery from the Covid lockdowns, with margins in particular recovering strongly as costs were cut. Activity levels are mostly still short of pre-Covid levels. We believe that the Mid Cap industrials still offer value relative to some of the larger companies.
Cashbuild – 2022 Update
Key message: Sales have slowed down (adjusted for looting impact) after the DIY boom post-Covid. This was well flagged.
Cement Import Monitor
Key message: October imports fell significantly to 35kt, well off September levels. This is a more expected outcome following supply chain disruptions.
Murray & Roberts – Trading Update
Key message: Management point to entering a multi-year period of strong earnings growth, which concurs with our forecasts. Delivery on the strong order book will be the key valuation factor going forward.
PPC – 1H FY22 Results
Key message: EBITDA margins remain under 20% due to high cost inflation. ITAC tariffs on imported cement and clinker are still likely, in our opinion, and would boost our valuation by over 100c.